"No common Kashmiri keeps large amounts of cash at home because of the disturbed situation," said Elizabeth Maryam who teaches economics in Kashmir University.

However, people have criticised official claims that the demonetisation move has reduced stone pelting or militancy in the valley.

As the rest of the country remains in a turmoil due to the demonetisation of the 500 and 1,000 rupees currency notes, people in Kashmir have accepted the move without any panic. “No common Kashmiri keeps large amounts of cash at home because of the disturbed situation,” said Elizabeth Maryam who teaches economics in Kashmir University.

“The salaried class gets monthly wages through bank accounts and they usual space withdrawals to suit daily needs. The skilled and unskilled workers mostly earn as much as they spend on an average. Big industrialists and businessmen never keep large amounts of cash at home in a conflict area. That is the reason why the demonetisation has little impact in Kashmir,” Maryam added.

According to Nazir Qazi, an officer of the local Jammu and Kashmir Bank, all the ATMs of the bank are fully stocked. “For the last eight days there has been no rush on either our branches or at our ATM outlets. Yes, people have been coming in for exchange of the demonetised currency notes or for deposit, but nobody was being hassled,” he added.

Muzaffar Ahmad, a college principal, said, “In a place where the protest shutdown has paralysed life for over four months, who would shoot up their blood pressure further over cash crunch?” However, people have criticised official claims that the demonetisation move has reduced stone pelting or militancy in the valley.

“The Defence Minister (Manohar Parrikar) has said stone pelting ended because of demonetisation. That is something nobody can accept in Kashmir,” said Zahoor Ahmad, 55, a local contractor. “Do you want us to believe that a youth is ready to be killed with a bullet or be blinded with a pellet because the separatists give him a 500 rupees note? That is absurd,” he said.

Intelligence officials, however, believe that using fake currency notes is part of the ongoing militancy and doing the same with the new currency notes would not take long.